Fannie Mae and Freddie Mac are being asked by their regulator to limit purchases to loans meeting qualified-mortgage requirements and those exempt from Dodd-Frank Act ability-to-repay rules.
The change announced today by the Federal Housing Finance Agency means that beginning Jan. 10 next year, the U.S.-owned companies won’t purchase interest-only mortgages, loans with 40-year terms or those with points and fees exceeding thresholds set by the Consumer Financial Protection Bureau.
The government-sponsored enterprises will continue to buy loans that meet their own underwriting and delivery eligibility standards, FHFA said in the statement. Most loans purchased by Washington-based Fannie Mae and Freddie Mac of McLean, Virginia, already meet qualified mortgage standards.
In January, the consumer bureau issued a final rule implementing the Dodd-Frank ability-to-repay provisions, including protections from liability for loans that meet the criteria of a qualified mortgage as outlined in the rule.